2014/15 DRAFT OPERATING PLAN AND BUDGET GENERAL MANAGER’S OVERVIEW Introduction:

2014/15 DRAFT OPERATING PLAN AND BUDGET
GENERAL MANAGER’S OVERVIEW
Introduction:
All councils in NSW are now required to prepare a ten year Community Strategic Plan which is
informed by a resourcing strategy comprised of a ten year Asset Management Plan, a ten year
Long Tem Financial Plan and a four year Workforce Strategy. In turn these documents will
inform a four year Delivery Programme and the annual Operational Plan and Budget for
2014/2015.
This is the third occasion Council has had to prepare this suite of documents (known as the
Integrated Planning and Reporting Documentation) and it can be considered an evolving
process with the quality of the contents of the various documents being progressively enhanced
as part of an ongoing process.
The Draft 2014/15 Integrated Planning and Reporting Documentation was adopted by Council in
principle and went on display on Tuesday 27 May, 2014. It will remain on display until Monday,
23 June, 2014 and submissions from the general public will be received up to 12 midday that
day.
A programme for a round of Community Forums is being planned for the three week period
immediately following the adoption in principle of the draft Budget and Operational Plan for
2014/2015 in early June, 2014. Details of these forums will be available from Council’s website
and in the local media.
These Forums will give both elected members and senior management staff the opportunity to
meet with local residents and ratepayers not only to explain the contents of the 2014/15 Draft
Budget, Operational Plan and supporting documentation Integrated Planning documentation,
but to also bring them up to date with the ongoing local government reform process which is
now approaching a critical stage.
2014/15 Draft Budget
The Budget has been cast on the basis of fully taking up the 2014/15 rate pegging allowance of
2.3% across all funds. Whilst the Water, Sewerage and Waste funds are forecast to operate at
a surplus before depreciation, Council is still struggling to be able to achieve a balanced
General Fund even before any attempt to fully provide for depreciation in that fund.
Council needs to be able to fully fund depreciation and achieve a surplus to be able to forecast
a sound and sustainable future. On more positive note, Council should be able to achieve a
small surplus when all fund forecasts are consolidated.
A summary of the forecast results for each fund is set out in the following table:
Fund
Operational
Capital
General Fund
(4,239,399)
8,224,806.00
Water Fund
(528,898.00)
737,000.00
435,599.00
(227,497.00)
Sewer Fund
(232,726.30)
200,000.00
175,415.00
(208,141.30)
Waste Fund
(60,271.80)
-
Depreciation
Result
3,985,407.00
Balanced
-
(60,271.80
This year’s Draft Budget has been prepared with a special focus on two key elements.
The first is to endeavour as far as possible to ensure Council continues to be financially
sound, flexible and sustainable.
This is particularly important having regards to the 2012 assessment of Walgett Shire as having
a Financial Sustainability Rating (FSR) of “Moderate” with a “Negative” Outlook. Last year
Council recognised that a number of issues that were flagged in local government reform
documentation were already in train at Walgett. These included applications to IPART and the
Division of Local Government for an extra 3% increase in the general rate across the Shire over
and above the rate pegging limit to fund our rural roads Betterment Programme and for a loan
interest subsidy under the State Government’s new Local Infrastructure Renewal Subsidy
(LIRS) scheme respectively.
The second is to address, and adequately provide for, the fact that large parts of Council’s area
continue to be badly affected by drought. Unfortunately, the State and Federal Government
assistance available in this regard continues to fall far short of community expectations.
Council’s efforts to pick up the short fall in certain areas will come at a cost.
At this stage we are still assessing the ramifications of the Federal Budget and are not sure
what new programmes and grant schemes are available and how they will impact on Council.
A similar situation exists with regards the State Budget which will not be handed down until
Monday 16 June, 2014 .
The exceptions to this are that that Federal FAG grants have been capped until 2018 and this
will mean an initial loss of grant funds estimated to be in the order of $200K in the first year
compounding to an estimated total loss of $2M over the next four years.
At a State level, RMS grants for 2014/15 have been provisionally advised to be a total of
$3.427M, down from $7.989M in 2013/14. We have also now fully expended flood damage
grants. To a degree the size of flood damage grants over the last three years has masked our
tight liquidity situation. This lower level of grant funding will place additional pressure on
ensuring we have adequate work for our outdoor workforce.
Hopefully, however, details of other Federal and State programmes will become available over
the next few weeks and possibly mean that Council will be able to make due provision in the
final Plan/Budget where appropriate. This will include new programmes for bridge renewal
works, regional water security, green army initiatives, black spot funding, R2R, the National
Stronger Regions Fund and 2015 centenary projects
As a result though, we still remain in a position of having to do a lot more with what little
resources we have at our disposal. As in the past, this represents an enormous challenge.
More than ever, we will have to do a lot of things differently if our community is to gain the
greatest benefits.
Council’s staff has been examining various options available to us including ensuring the impact
of unfunded mandates and provision of services on behalf of other tiers of government and to
the private sector is fully recouped.
In the main this will be done in three ways, through
increasing the indirect overheads charges on various grant and private works to a more
reasonable level so as to completely cover our costs, the regular review of plant hire charges in
line with CPI fluctuations and through the Outback Shires Association joint resourcing initiatives.
Other issues such as superannuation and workers’ compensation premiums are also being
closely scrutinised along with asset management issues to properly provide for both adequate
asset maintenance and renewal. Our workers’ compensation premium in 2014/15 is estimated
to rise to being in the order of $500K. Superannuation will rise by 0.25% to 9.5%.
It is important for Council to take the hard option and provide for the future by way of adequate
transfers to identified reserves. In the years to come, these reserves will be able to be used to
fund various key acquisition and/or revenue items without any adverse impact on Council’s
financial integrity at that time.
In view of our extremely tight financial situation, our Finance Manager has been requested to
review our externally restricted grant/internally restricted reserves to see if there is any
possibility of bringing some funds into play to provide for additional capital works in 2014/15.
This information will be available before Council formally adopts the 2014/15 Operational Plan
and Budget in late June, 2014.
The matter of “user pays” has been revisited in relation to domestic waste, water and sewerage
charges. Particular attention is being paid to endeavouring to apply this approach the
consumers from the area surrounding Lightning Ridge who regularly draw water from the town
supply but make no contributions.
Service delivery standards will be under scrutiny during the coming year as a means of ensuring
the broader community becomes more aware of the competing basis for fund allocation.
As is usually the case, it is anticipated that a number of submissions will be forthcoming during
the public exhibition period. Council will have the opportunity to consider the various issues
raised when it considers the formal adoption of the draft documentation plans at a Council
Meeting in the last week in June 2014.
Legislation provides for Council’s activities to be split into “strategic” issues in the Community
Strategic Plan, provide details of ongoing works and services to be undertaken in the four year
Delivery Programme and set out projects, works and services to be undertaken in the next
twelve months in “operational” functional areas in the annual Operating Plan and Budget for
2014/2015. This allows Council and the community to be afforded the opportunity of having
greater input and, in turn, greater responsibility and ownership of the planned outcomes.
Council has reviewed the various strategic issues identified in the Community Strategic Plan
and made minor amendments as required.
Councillors have also identified additional specific issues to be addressed in the 2014/15
Operational Plan, and similarly there have been some items flagged in the four year delivery
programme that are either new inclusions or elevated in priority.
Details of key capital items that, were considered for inclusion in the 2014/2015 Draft Budget
and Operational Plan and the years ahead, are set out in the capital items worksheet. Most
had already been given high, medium or low priorities at the strategic planning meeting held on
8 April, 2014 and this has assisted with long term financial planning.
During 2014/15 it is proposed to undertake a review of all of Council’s assets with the aim of
identifying “lazy assets” that might be turned into cash to fund future capital works project.
Details of Councillors’ Budget Requests and how they have been within the budget limitations
are included on a separate spreadsheet.
2012/2022 Community Strategic Plan
The Community Strategic Plan has been updated to provide for the following issues:
 Walgett Weir Strategy
 Shire Airports Strategy
 Transport/Freight Centre Strategy
 Land Development
2012/2016 Delivery Programme and 2014/2015 Operational Plan
The Delivery Plan and Operational Plan have been updated or amended as required to reflect
changes and provisions made/included in the 2014/15 Draft Budget.
2014/2015 Statement of Revenue Policy
The 2014/2015 Revenue Policy provides for the following:
General Purpose Rating
General rates modelling for the 2014 / 2015 financial year has been undertaken based on the
current valuations including consideration of the following factor:


The total notional increase set by IPART for the 2014 / 2015 year of 2.3 %
The 2014 / 2015 budget incorporates total general purpose rate income with an increase
of 2.3 %.
The rating schedule detailing the rating structures and notional income return for each category
is included within the Fees and Charges schedule included within the special budget
attachments folder.
2014 / 2015 Fees and Charges
The fees and charges have been reviewed and largely remain at 2013 / 2014 levels.
Some fees such as the Sec 603 rates certificate are legislated and the fee reflects advice from
the Office of Local Government.
The fee for line marking sporting ovals has been increased to
$690.80 (inc GST) to reflect a position closer to cost recovery for this service.
The full Schedule of Fees and Charges schedule is included within the supporting
documentation.
Section 356 Donations
Council has included within its 2014 / 2015 budget a total of $624,000 to be given in accordance
with section 356 of the Local Government Act as detailed below;
Section 356 Donations and Subsidies
Section 356
Section 356
Association
Section 356
Section 356
Total Draft
2012/13
Budget $
Expenditure – Community Assistance
Expenditure – Glengarry Grawin Sheepyards Miners
10,000
Expenditure – Burren Junction Pool
Expenditure – Lightning Ridge Pool
26,000
20,000
350,000
Section 356 Lightning Ridge Opal Queen
Section 356 Lightning Ridge Jewellery Design Award
Section 356 Lightning Ridge Information Centre
Subsidy – Fees and Charges Rebates, Local Churches
Clr Geoffrey (Dick) Colless Scholarship
Donation – Barwon Cup CWA Medical Scholarship Scheme
Community Centre operational support
Housing subsidy – Medical Practitioners
Lightning Ridge Australian Opal Centre
6,000
3,500
115,00
15,000
10,000
3,000
10,300
5,200
10,000
$584,000
2012/2022 Long Term Financial Plan
The Long Term Financial Plan has been revised in accordance with the various provisions
made in the 2014/15 Draft Budget.
Other Integrated Planning and Reporting Documentation
Other supporting documentation has been updated as necessary as reflected by changes in the
principal documentation
Conclusion:
The community is urged to take an active interest in reviewing and commenting on the Draft
2014/15 Budget, Operational Plan and associated documentation now on public exhibition until
midday on Monday 23 June, 2014.
I would like to take this opportunity to extend my thanks for the time and efforts our key staff
have put into the preparation of this plan. It would be inappropriate to single out anyone in what
has really been a concerted team effort but I commend them all on the fruits of their labours.
Messrs Brad Pascoe, our Finance Manager, Stephen Holland, our Director of Corporate
Services, and I will be available at any time to respond to any enquiries in relation to any issues
associated with the draft documentation. Quite often a few minutes spent now can save a lot of
time and heartache later. Remember well founded comments on the Plan are always welcome.
It also needs to be recognised that our draft 2014/15 Budget and Operational Plan, coupled with
the supporting integrated planning and reporting documentation, are living breathing documents
that can and will be varied following the exhibition period to meet emerging or changing
circumstances.
Interested members of the Shire community are invited to put forward their views by way of
submission during the public exhibition period.